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State regulators ban sale of NRA-affiliated insurance and propose fines of $177,000

The sale of illegal insurance policies branded by the National Rifle Association are being banned and two companies involved in underwriting and selling them in Washington state may be fined.

The Washington State Insurance Commissioner’s Office ordered Illinois Union Insurance Co. to stop underwriting the policies, branded under the NRA as self-defense policies. They’re illegal in Washington state because they insure unlawful activity, said Insurance Commissioner Mike Kreidler.

The agency also is proposing to fine the company $102,000 for selling 811 of the illegal policies to Washington state consumers.

In addition, the agency is proposing to fine Lockton Affinity $75,000. Lockton Affinity is the licensed insurance producer that sold the illegal policies on behalf of the NRA.

“When it comes to insurance products associated with the NRA, it’s buyer beware,” Kreidler said. “The attempt to insure a criminal act is a rip-off for consumers. The policies sold are deceptive and dishonest.”

The companies have until Feb. 14 to agree to the terms of the fines or request a hearing.

The policies were sold through the NRA’s Carry Guard program and give upfront money to policyholders for covered costs and expenses related to criminal defense for gun owners, even if the insured later pleads guilty to or is convicted of a crime.

Since the insurance became available in April 2017, 811 policies were sold in Washington, totaling $260,000 in premiums. Of those policies, 255 consumers canceled their policies and no claims have been made in the state.

Illinois Union Insurance Co., a subsidiary of Chubb Ltd. Group, has said it will stop selling the liability policies nationwide in October 2019.

Nationally, the insurer has paid less than 1 cent in claims for every dollar collected in premiums in 2017 and 2018, according to figures provided to the agency.

In April, Kreidler’s ordered the NRA to cease and desist from selling four Carry Guard liability insurance products through its website. The NRA solicited the policies in Washington state without an insurance producer license, a violation of state law. That order resulted from a consumer complaint. The NRA made changes to its marketing website in Washington to address the agency’s concerns.

Note: This is a seattlepi.com reader blog. It is not written or edited by the P-I. The authors are solely responsible for content. E-mail us at newmedia@seattlepi.com if you consider a post inappropriate.